11.9 AI Daily AI Evolution Surpassing Humanity: OpenAI Predicts Upgrade in Research Capabilities

1. Headlines

1. OpenAI releases a lengthy report: AI capabilities are rapidly evolving and may dominate scientific breakthroughs.

OpenAI recently released its latest long report “AI Progress and Recommendations”, which comprehensively reviews recent breakthroughs in artificial intelligence, future development pace, and directions for safety governance. The report points out that AI systems are no longer limited to chatbots or search engine assistance, but are gradually able to surpass the knowledge-based competitions and research tasks of the smartest human minds.

OpenAI predicts that by 2026, AI will be capable of making micro scientific discoveries, and by 2028, it will possess the ability to achieve significant scientific breakthroughs. However, at the same time, the safety of AI must also be controlled in parallel. The acceleration of AI capabilities: from second-level tasks to century-level tasks. OpenAI points out that the pace of AI advancement far exceeds social awareness. In just a few years, AI has progressed from being able to complete tasks that humans can do in a few seconds to being able to perform work that takes several hours or even days. In the coming years, AI will be able to handle research that would take humans a century to complete.

Report analysis shows that the cost of AI training is rapidly decreasing, by about 40 times each year. This means that AI systems will acquire powerful capabilities faster and cheaper, and will replace humans in more fields. OpenAI calls for an acceleration in the research pace of AI safety and governance to ensure that the development of AI is beneficial to humanity.

2. Major tech stocks in the US market suffered a heavy blow, analysts warn: the Nikkei index may plummet.

The US stock market experienced a sharp decline this week, with the Nasdaq index, represented by technology stocks, falling more than 5%, marking the largest weekly drop since January 2022. Analysts warn that if the tech stock boom encounters problems, the Japanese stock market will also suffer a massive impact.

“If any issues arise with the AI or semiconductor boom, the Nikkei index will plummet immediately,” said Takehiko Masuzawa, head of stock trading at Japanese brokerage Phillip Securities. “I do believe we will continue to see more corrections and increased volatility.”

Data shows that the top five tech stocks in the Nikkei 225 index account for nearly 40% of the total weight, meaning that the performance of tech stocks will directly determine the movement of the Nikkei index. Over the past year, the rise of the Japanese stock market has mainly benefited from the popularity of tech stocks and artificial intelligence concept stocks.

Goldman Sachs traders are relatively optimistic about this. They believe that despite the market experiencing a pullback, there is still room for an increase before the end of the year. With the combined effects of seasonal factors, the still early stage of the AI investment cycle, and relatively light institutional positions, the index still has the potential to rise further.

3. The U.S. government shutdown affects the release of employment data, and the Federal Reserve faces a decision-making dilemma.

Due to the longest government “shutdown” in U.S. history, the Federal Reserve is facing difficulties in making key policy decisions, and the release of important economic data has been delayed.

The U.S. government went into a “shutdown” status on November 3rd due to Congress's inability to reach an agreement on the 2024 fiscal year spending bill. The government closure forced approximately 800,000 federal employees to take leave, and multiple government departments were forced to cease operations.

Employment data is one of the important reference indicators for the Federal Reserve in formulating monetary policy. However, due to the government shutdown, the Bureau of Labor Statistics was unable to release the October employment report as scheduled. This leaves the Federal Reserve lacking the latest signals from the labor market during its interest rate decision meeting in December.

Analysts point out that, in the absence of key data, the Federal Reserve can only rely on other economic indicators, such as inflation data, consumer spending, etc. However, these indicators often lag behind changes in the labor market, which may affect the Federal Reserve's judgment on the economic situation.

Federal Reserve Chairman Powell previously stated that the pace and magnitude of interest rate hikes would be determined by the performance of the job market. If the job market is too hot, the Fed may increase the rate of hikes; conversely, it would slow down. Therefore, the absence of employment data undoubtedly increases the difficulty of decision-making for the Fed.

4. The Trump administration secretly reduced taxes for super-rich corporations, which may be unconstitutional.

According to foreign media reports, the Trump administration secretly provided massive tax cuts to super-rich corporations, including preferential new regulations for foreign investors, attracting the attention of accounting and consulting firms. Experts pointed out that this move may violate constitutional principles.

For example, in October this year, the IRS ( released new proposed regulations that would provide benefits for foreign investors investing in US real estate. In August this year, the IRS ) proposed to relax regulations that prevent multinational companies from avoiding taxes by claiming duplicate losses in multiple countries.

Kyle Pomerleau, a senior researcher at the American Enterprise Institute, stated: “The U.S. Treasury has clearly been implementing tax cuts without legislation. Congress determines tax laws. The Treasury asserts greater power over the structure of tax laws than what Congress has granted, undermining this constitutional principle.”

These announcements have not yet made headlines, but they have caught the attention of accounting and consulting firms. They are concerned that if the Treasury Department oversteps its authority, it will undermine tax fairness and the rule of law. Some companies are even considering filing a lawsuit regarding this matter.

( 5. Hong Kong police prosecute 16 individuals in a case, will optimize virtual asset regulation.

The Hong Kong police have prosecuted 16 people in connection with a virtual currency trading platform suspected of fraud, with the first case involving 8 defendants being referred to the High Court for trial. Hong Kong's Secretary for Financial Services and the Treasury, Christopher Hui, stated that the authorities will consider optimizing regulations in four areas: trading, stablecoins, custody, and digital asset traders after the case.

According to previous news, the police have prosecuted several core members and internet celebrities, including founder Lin Zuo, but the mastermind involved is still at large. The charges allege that Lin Zuo falsely represented or allowed others to make false statements between July 8 and September 12, 2023, and made fraudulent or misleading false statements to induce others to invest in virtual assets.

The prosecution pointed out that Lin Zuo has been accused of being able to successfully extract assets, possessing internal information that ordinary investors cannot access, and claiming that specific percentages of returns can be obtained through investments in designated virtual assets.

The Hong Kong Securities and Futures Commission stated that it will continue to cooperate with the police to thoroughly investigate violations of laws and regulations related to the case. At the same time, it will optimize the regulation of virtual assets to maintain Hong Kong's status as a financial center and protect the legitimate rights and interests of investors.

2. Industry News

) 1. Bitcoin's short-term rebound is difficult to sustain, and investor sentiment is cautious.

The price of Bitcoin rebounded slightly on November 9, briefly surpassing the $102,000 mark. However, analysts pointed out that this rebound is unlikely to be sustained, mainly due to increased uncertainty in the macroeconomic outlook and investors' cautious attitude towards risk assets.

Bitcoin has recently experienced a significant decline, primarily influenced by expectations of interest rate hikes from the Federal Reserve and a slowdown in the global economy. Although this round of rate hikes may be nearing its end, high inflation and pressure in the job market make it difficult for the Federal Reserve to shift to an easing stance too soon. Against this backdrop, risk assets like Bitcoin find it challenging to attract substantial inflows of capital.

On the other hand, the Bitcoin futures and options market shows that investor sentiment regarding the future trend of Bitcoin has weakened. The futures premium and the implied volatility of options are both at low levels, reflecting that investors do not have high expectations for a significant rise in Bitcoin in the short term.

Analysts suggest that Bitcoin may oscillate within the range of $90,000 to $110,000 in the short term. Unless significant positive factors emerge, it will be difficult to regain upward momentum. Investors need to closely monitor macroeconomic data and the direction of Federal Reserve policies, and cautiously manage risks.

2. Ethereum experiences capital outflow, on-chain activity declines

The price of Ethereum slightly dropped on November 9, briefly falling below the $3400 mark. Data shows that both the on-chain activity and capital inflows for Ethereum have declined over the past week, reflecting a cooling enthusiasm among investors for Ethereum.

According to Glassnode data, approximately 291,000 Ethereum flowed out of cryptocurrency exchanges in the past week, indicating a trend of capital outflow. Meanwhile, the number of active addresses on the Ethereum chain and the number of transactions have also declined.

Analysts point out that the decrease in on-chain activity of Ethereum may be related to the recent slowdown in the development of Ethereum ecosystem projects. Although Ethereum has completed the “Merge” upgrade, the pace of innovation in ecosystem applications seems to have slowed down, making it difficult to attract new capital inflows.

In addition, the investor sentiment in the Ethereum futures and options market has also cooled down. Both the futures premium and the implied volatility of options are relatively low, reflecting investors' low expectations for a significant rise in Ethereum in the short term.

However, analysts believe that the long-term prospects of Ethereum remain promising. As the Ethereum ecosystem gradually matures, its value as the infrastructure of the cryptocurrency space will gradually be realized. Investors can seize the opportunities brought by short-term fluctuations, but they need to remain patient.

3. Altcoins are expected to lead the next round of rebound, investors need to be cautious of risks.

Bitcoin's dominance has recently declined, raising market expectations for a rebound in altcoins. Analysts suggest that altcoins may lead the next round of rebound, but investors should also be wary of potential risks.

Data shows that Bitcoin's dominance in the cryptocurrency market has dropped to around 38%, the lowest level in recent years. Meanwhile, some well-known altcoins such as Solana and Avalanche have shown early signs of capital inflow.

Analysts believe that the main driving force behind the rebound of altcoins is investors' bearish sentiment towards Bitcoin. When Bitcoin's dominance declines, it often indicates that funds will flow into other cryptocurrencies, triggering a rise in altcoins.

However, the rebound of altcoins also faces some risks. Firstly, the volatility of altcoins is often greater, and investors need to have sufficient risk tolerance. Secondly, the development prospects of altcoins still have uncertainties, and investors need to carefully assess the quality of the projects.

Overall, the rebound of altcoins may bring some investment opportunities, but investors need to remain cautious, manage their risk exposure, and closely monitor market dynamics.

3. Project News

1. OpenAI releases AI progress report: Artificial intelligence will surpass human research capabilities.

OpenAI recently released its latest long report titled “AI Progress and Recommendations,” which comprehensively reviews recent breakthroughs in artificial intelligence, future development pace, and directions for safety governance. The report points out that AI systems are no longer limited to chatbots or search engine assistance, but are gradually able to surpass the knowledge-based competitions and research tasks of the smartest human minds.

The report predicts that by 2026, AI will be capable of completing micro scientific discoveries, and by 2028, it will have the ability to achieve significant scientific breakthroughs. OpenAI believes that the accelerated evolution of AI capabilities will progress from second-level tasks to century-level tasks, with costs decreasing by 40 times each year. However, at the same time, the safety of AI must also be controlled in parallel.

The report has sparked widespread attention in the industry. Analysts believe that OpenAI's predictions may be somewhat optimistic, but AI is indeed developing rapidly and will bring revolutionary changes to scientific research and productivity. Some scientists are concerned that if AI truly surpasses human intelligence, it could lead to unpredictable risks. Overall, the report once again highlights the immense potential of AI technology and the importance of its safety.

2. The Sui ecosystem continues to expand, and the Move language project has attracted attention.

The Move language ecosystem has been continuously heating up recently, with the Sui ecosystem being the most active. Sui is a brand new blockchain founded by former employees of Meta###Facebook###, and it uses the Move language to write smart contracts.

The latest developments in the Sui ecosystem include: the launch of Sui trust products by Grayscale Trust, providing a participation channel for institutional investors; the launch of native USDC on Sui, injecting liquidity into the ecosystem; the debut of the first game in the Sui ecosystem, SuiPlay, at the KBW conference in South Korea, showcasing the game's potential. In addition, the Sui ecosystem has attracted several well-known projects, such as Cetus and Navi.

Analysts believe that the rapid development of the Sui ecosystem is attributed to the technical advantages of the Move language and the Sui team's extensive background in the blockchain field. The Move language is considered the next generation smart contract language, offering higher security and composability. The continuous expansion of the Sui ecosystem will drive the application of the Move language in the blockchain field.

However, there are also views that point out that the Sui ecosystem currently has few tradable assets and limited star projects, requiring more innovative projects to settle in. Overall, the Sui ecosystem is seen as one of the most promising members of the Move language ecosystem, and its future development is worth continuous attention.

( 3. Stable Labs Incident: Re7 Labs suffers significant losses and seeks legal remedies.

On November 4th, Re7 Labs detected abnormal activities related to accounts of the largest holders of the stablecoins USDX and sUSDX under Stable Labs, leading to a surge in lending rates. After unsuccessful communication with the founder of Stable Labs, Re7 Labs took protective measures but still suffered a loss of about 13.11 million dollars.

Re7 Labs stated that it is currently communicating with external partners and legal advisors to seek detailed legal advice in order to develop a response strategy. It is reported that Lista DAO has liquidated related malicious positions through a proposal, avoiding bad debt risks of approximately $3 million to $4 million.

The event has sparked widespread attention in the industry. Analysts point out that this once again highlights the regulatory gaps and potential risks in the DeFi space. Stablecoins have long been regarded as a key infrastructure of the DeFi ecosystem, and any issues that arise could impact the entire ecosystem.

At the same time, there are views that this event may promote the DeFi ecosystem to accelerate the improvement of risk control and auditing mechanisms, enhance transparency, and thereby strengthen the industry's ability to withstand risks. Overall, the experience of Re7 Labs has sparked widespread reflection on the security of DeFi within the industry.

) 4. Gauntlet suggests Euler remove rUSD and srUSD, optimize the product matrix.

The DeFi risk management protocol Gauntlet recently released a new proposal in the Euler community, suggesting the removal of the stablecoins rUSD and srUSD from Euler Yield.

Analysis of Gauntlet shows that the supply of rUSD and srUSD has significantly decreased over the past 30 days, with the current total supply being less than $20,000. It is expected that there will not be a large user demand in the future. Therefore, retaining these two stablecoins will increase Euler's operational costs and risk exposure.

The proposal has received widespread support within the community. Analysts believe that timely optimization of the product matrix is crucial for any DeFi protocol, as it helps to focus resources and reduce operational costs. In addition, promptly eliminating products with lower demand also contributes to enhancing the overall security of the protocol.

However, there are also views that suggest Gauntlet's recommendations may be too conservative. DeFi protocols should not overly pursue short-term profit maximization, but should maintain a certain level of diversified development. Overall, the proposal reflects that the DeFi industry is gradually moving towards a more rational and pragmatic development path.

4. Economic Dynamics

1. The US government shutdown affects the release of economic data, posing challenges for Federal Reserve decision-making.

The current U.S. government shutdown has lasted for two weeks, delaying the release of key economic data such as employment and inflation figures. This poses challenges for the Federal Reserve in making decisions at its monetary policy meeting in December.

Economic Background: The U.S. economy experienced high inflation and a rate hike cycle in 2022, with the annualized GDP growth rate for the third quarter at 2.6%, a slowdown from the previous quarter. The inflation rate in October was 7.7%, above the Federal Reserve's target level of 2%. The unemployment rate lingered at a low of 3.7%, and the job market remained tight.

Important events: The U.S. government shut down in mid-November, preventing the Department of Labor from releasing the November employment report and the Department of Commerce from disclosing the October inflation data. The postponement of these data left the Federal Reserve without the latest economic indicators to base its decisions on during the policy meeting on December 18-19.

Market Reaction: Investors are divided on whether the Federal Reserve will continue to raise interest rates by 75 basis points in December. Some analysts believe that, in the absence of new data, the Fed may slow down the pace of rate hikes. However, some experts argue that, given inflation remains high, the Fed may maintain a tough stance.

Expert Opinion: Goldman Sachs economists believe that, despite the lack of official data, private employment and consumer spending data can still provide some guidance for the Federal Reserve. However, they also acknowledge that the government shutdown has introduced uncertainty into the Fed's decision-making.

Bank of America Merrill Lynch economists stated that the Federal Reserve may determine the rate of interest rate hikes based on other economic indicators and officials' statements, such as service industry data and consumer confidence index. However, they also warned that a government shutdown could prolong the Federal Reserve's interest rate hike cycle.

2. The Governor of the Bank of Japan has issued a warning that the Nikkei index could plummet.

The Governor of the Bank of Japan, Haruhiko Kuroda, recently issued a warning that the Nikkei stock index could see a sharp decline. His comments have heightened concerns about the outlook for the Japanese economy.

Economic background: Japan is the world's third-largest economy, but has long been trapped in a dilemma of deflation and weak growth. In the third quarter of 2022, the annualized GDP decreased by 0.8% year-on-year, a decline compared to the previous quarter. The core inflation rate in October was 3.6%, the highest since 1982.

Important Event: In his latest speech, Haruhiko Kuroda stated that if any issues arise with the artificial intelligence or semiconductor boom, the Nikkei index will immediately plummet. His remarks raised concerns in the market regarding the outlook for the Japanese economy.

Market reaction: Kuroda's remarks immediately triggered a decline in the Nikkei index. Investors are concerned that Japan's economy is highly dependent on the tech industry, and any issues could deal a heavy blow to the economy. The Nikkei index fell more than 1% that day.

Expert Opinion: Nomura Securities analysts stated that Kuroda's remarks reflect the Bank of Japan's concerns about the economic recovery. They believe that the Japanese economic recovery remains fragile and is easily affected by external shocks.

On the other hand, Goldman Sachs analysts believe that Kuroda's remarks could trigger further market volatility. They warn that if the Bank of Japan fails to effectively communicate its policy intentions, it may exacerbate uncertainty in the market.

3. The European Central Bank faces divisions, and the digital euro plan encounters resistance.

The European Central Bank's push for a digital euro plan has encountered resistance, with the German Banking Industry Committee and some European parliamentarians opposing the plan. This highlights the divisions and challenges the European Central Bank faces in advancing digital currency.

Economic Background: The Eurozone economy was severely impacted in 2022 by the Russia-Ukraine conflict, the energy crisis, and high inflation. In the third quarter, GDP growth was only 0.2% year-on-year, and the inflation rate surged to a historical high of 10.6% in October. The European Central Bank has raised interest rates three times consecutively since July to curb rising inflation.

Important Event: The European Central Bank's Governing Council has decided to advance to the next phase of the digital euro project, planning to launch a pilot project in 2027 and officially go live in 2029. However, the German Banking Industry Committee and European Parliament member Fernando Navarrete have expressed opposition to this.

Market Reaction: The market has divergent views on the prospects of the digital euro plan. Supporters believe that the digital euro will help improve the efficiency of payment systems and enhance the international status of the euro. However, opponents are concerned that it may affect banking business models and exacerbate the complexity of monetary policy.

Expert Opinion: Experts from the German Institute for Economic Research indicate that the digital euro may undermine the deposit base of commercial banks, thereby affecting their ability to create credit. They suggest that the European Central Bank should proceed with caution in advancing this plan.

On the other hand, former President of the European Central Bank, Draghi, supports the digital euro, believing it will help maintain the status of the euro and provide the public with a secure and reliable digital payment method. He called for all parties to reach a consensus to promote the project.

5. Regulation & Policy

1. The Hong Kong Monetary Authority announced the “FinTech 2030” strategy, focusing on four key areas.

The Hong Kong Monetary Authority ### announced the “Fintech 2030” strategy at this week's Fintech Week, aiming to transform Hong Kong into a robust, resilient, and forward-looking international fintech hub. The strategy focuses on four key areas: data and payment infrastructure, artificial intelligence, technological resilience, and financial tokenization, proposing more than 40 specific measures.

As the overall plan for the development of financial technology in Hong Kong, this strategy reflects the Hong Kong Monetary Authority's determination to promote financial innovation and the application of emerging technologies. The Monetary Authority believes that financial technology is key to maintaining Hong Kong's status as an international financial center, helping to improve efficiency, enhance competitiveness, and meet the ever-changing needs of customers.

The “Fintech 2030” strategy covers multiple aspects. In terms of data and payment infrastructure, the Monetary Authority will promote the establishment of new payment infrastructure and explore the development of central bank digital currencies. In the field of artificial intelligence, the focus will be on developing applications such as regulatory technology and intelligent analytics. In addition, the Monetary Authority will strengthen cybersecurity and technological resilience, and promote financial tokenization, including regulatory frameworks for digital assets and cryptocurrencies.

Industry insiders generally welcome this. Chen Shouxin, the chairman of the Hong Kong Fintech Association, believes that this strategy reflects the foresight of the Monetary Authority and will help Hong Kong maintain its leading position in the fintech sector. He pointed out that financial tokenization is a major trend for future development, and the establishment of a relevant regulatory framework will bring certainty to the industry.

Experts and scholars call on the Monetary Authority to balance innovation and risk management when formulating specific measures. Chen Jiahua, the director of the Financial Technology Laboratory at The Chinese University of Hong Kong, stated that the development of financial technology requires inclusive regulation, allowing innovators some room, while also preventing systemic risks. He suggested that the Monetary Authority maintain close communication with the industry to jointly promote the healthy development of financial technology.

2. The U.S. Treasury Department has been exposed for providing large-scale tax breaks to companies without legislative approval.

According to reports, the U.S. Treasury Department has proposed regulations that offer tax relief to private equity firms, cryptocurrency companies, foreign real estate investors, and other large corporations, sparking controversy. Some experts point out that this practice may violate constitutional principles.

According to reports from The New York Times, the Trump administration secretly provided large-scale tax breaks to some super-wealthy corporations during its tenure. For example, in August this year, the IRS proposed relaxing regulations that prevent multinational companies from avoiding taxes by declaring duplicate losses in multiple countries. In October of this year, the IRS issued new proposed regulations that would offer benefits to foreign investors investing in U.S. real estate.

These measures have not yet received widespread attention, but they have been noticed by accounting and consulting firms. Kyle Pomerleau, a senior fellow at the American Enterprise Institute, stated: “The U.S. Treasury has clearly been implementing tax cuts that have not been legislated. Congress determines tax law. The Treasury is asserting powers over the structure of tax law that are greater than those granted by Congress, undermining this constitutional principle.”

Financial technology companies and cryptocurrency enterprises may also benefit from this. Although the specific details are not clear, industry insiders are concerned that this may further distort the market environment and exacerbate unfair competition.

Regulators have remained silent on this. Some experts believe this reflects the Trump administration's favoritism towards traditional financial institutions and tech giants. Steven Ros, a senior policy analyst at the Urban-Brookings Tax Policy Center, stated: “This is a practice that favors big companies while ignoring the interests of small and medium-sized enterprises.”

However, there are also views that moderate tax cuts can help attract foreign investment and promote economic development. But the key lies in transparency and procedural legitimacy. Jason Furman, an economics professor at Harvard University, stated: “If the Treasury's actions are based on reasonable considerations, it should be explained publicly, rather than conducted in secret. Otherwise, it would be viewed as an abuse of power.”

( 3. EU regulators call for enhanced privacy protection to address the new pattern of We.

With the rise of We and blockchain technology, privacy protection is becoming an increasingly important issue. EU regulators have recently called for strengthened privacy protections to address the new privacy landscape.

Traditionally, privacy has been seen as a compliance issue, a responsibility that developers need to consider. However, with the development of Web3, privacy is becoming a critical issue, even regarded as the cornerstone of digital freedom. The recent launch of the privacy cluster by the Ethereum Foundation marks this philosophical shift.

Agata Ferreira, an assistant professor at the Warsaw University of Technology, pointed out: “In the We world, a new consensus is forming. For many years, privacy has been seen as a compliance issue, the responsibility of developers, and at best just a niche concern. It is now becoming increasingly clear that privacy is actually a key issue.”

EU data protection regulators have called for strengthening privacy protection to keep up with the new privacy paradigm. They believe that existing privacy regulations may not fully adapt to the challenges posed by We and require appropriate adjustments.

In addition, regulators have emphasized the importance of transparency and accountability. While blockchain technology can enhance transparency, it may also introduce new privacy risks. Therefore, clear rules need to be established to regulate the collection, use, and sharing of data.

Insiders agree with this. Christina Charles, head of privacy products at the Ethereum Foundation, stated: “Privacy should not be a privilege, but a basic right for everyone. We need to work together on both technical and legal levels to ensure privacy is fully protected.”

However, some people are concerned that excessive regulation may hinder innovation. Aleo founder Zachary Brown believes that regulators should take an inclusive yet cautious approach, giving the industry some space to develop. He said: “We need to seek a balance between privacy protection and innovation, allowing good ideas the opportunity to materialize.”